Essays on Why the Australian Government Needs to Support the Car Industry Case Study

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The paper "Why the Australian Government Needs to Support the Car Industry" is a perfect example of a business case study.   The Australian car industry is one of the strategic industries in the country. A strategic industry is a high growth industry that may generate high rates that lead to increased economic growth. It is an important industry considering how it contributes to the Gross Domestic Product. This is one of the reasons as to why the Australian government considers providing it with financial and other forms of assistance. However, continued support to the car industry through subsidies and reduction of tariffs may have various benefits to the economic growth of the country.

It may also bear fruits to use tax payer’ s money to support the car industry. This report, therefore, considers reasons as to why the Australian government should continue to fund the car manufacturing industry with the taxpayers’ money. One of the major problems with the car industry in Australia is that it may be difficult to sustain its product development as well as manufacturing without the intervention of the government.

The car industry and its suppliers face a major challenge in ensuring successful competition in investment from the one set by traditional car manufacturers Australia. This is due to the changes that are occurring in the global automotive industry especially in the large investment flows towards enhancement of car manufacturing capability in the major upcoming automotive manufacturing countries. Another challenge lies in the need to improve the environmental performance of Australian manufactured cars. These are some of the challenges that call for government support to enable the industry to withstand them. Potential Benefits of the green car program The green car program is a future plan that will see the country enjoy benefits such as the attraction of new investments.

With the changes in the global automotive market, it is important for Australia’ s automotive industry to catch up with these changes. Low-cost competitors are on the rise and the rise in the prices of fuel has changed the environment in which the vehicles and component manufacture operate. The green car program will also make the car industry greener. This means changing it towards changing consumer preferences.

The preferences of the car industry consumers are changing towards fuel-efficient cars and low emission vehicles. Other vehicle manufacturers in the world are also changing towards greener vehicle technologies However, to achieve all this, a lot of innovation is required. 5.3% of business spending in research and development is accounted for by the automotive industry in Australia. The government support for the green car plan will, therefore, increase the industry’ s research and development and this will lead to increased innovative activities (Bracks, 2008, 42). The future of the car industry in Australia lies in its innovative capacity.

With the rising living standard of Australians, the car industry cannot rely on low-cost production strategies. It has to produce cars of superior value for its both local and overseas customers otherwise it will lose its market position (Australian Government, 2008, 7-8)

Bibliography

Australian Industry Group, (2002), Australia’s automotive industries: A core foundation of the Australian economy. Automotive Industry Inquiry Productivity Commission, Melbourne.

Australian Government, (2008). A New Car Plan for a Greener Future. Commonwealth of Australia.

Beissmann,T. (2012), Car Industry central to Australia’s manufacturing future, Retrieved on 8th May 2012 from http://www.caradvice.com.au/156245/automotive-industry-central-to-australias-manufacturing-future-carr/

Bracks, S. (2008). Review of Australia’s Automotive Industry: Final report. Commonwealth of Australia.

Clark, C., Geer, T., and Underhill, B. (1996), The changing of Australian Manufacturing. Commonwealth of Australia.

Federal Chamber of Automotive Industries, (2008), Submission to the Review of Australia’s Automotive Industry, FCAI, Canberra.

Sen, S. (2010). International Trade Theory and Policy: A review of the Literature. Levy Economics Institute of Bard College, New York.

Straight Times Motoring, (2012). GM gets $363 million Australian Government handout. Retrieved on 8th April 2012 from http://www.straitstimes.com/Motoring/Story/STIStory_780914.html

Trakman, L. (2010). Foreign Direct Investment: An Australian Perspective. University of New South Wales.

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